When Apple first released iTunes Match in beta form for developers on Tuesday, the company said that the new iCloud-based service would not stream music from its servers but rather allow customers to play them back while it downloaded them to the device. Since the songs were only being downloaded temporarily in the previous beta version of iOS 5, however, it led us to think that Apple was just choosing not to use the word “streaming” to make the feature less confusing for users.

In the latest beta, when you tap on any song listed on your device but stored only in iCloud, it starts downloading and playing it simultaneously (which is effectively streaming). But, unlike in the previous beta, when you now tap on another song, the previous one continues to show a download indicator as it makes a copy of it from the server to your device. When it’s done downloading, the download indicator vanishes and there’s no option to download it from iCloud anymore, because the song is now stored on your device. In other words, this is a “simultaneously listen and download” service, exactly as Apple described it before.

Take a look at Insanely Great Mac’s video of this in action below.

youtube.com/v/3sgtK63DALQ?version=3&hl=en_GB">

Interestingly enough, iTunes Match still works as a pure streaming solution in the latest beta of iTunes 10.5 for the desktop, also released alongside the iOS 5 beta on Wednesday.

Since all three components of this service are currently in beta, it’s likely that things will change as we approach the final release. As of now though, it seems that Apple would rather have you store the songs locally whenever you can rather than download them from its servers over and over again.